Distinction Between Assets And Liabilities - SS1 Accounting Lesson Note

Assets are things that a company owns or controls, and they have value. Examples of assets include cash, investments, property, and inventory. Assets are resources that a company can use to generate income, and they can be tangible (such as property) or intangible (such as patents).

Liabilities, on the other hand, are what a company owes to others. They are financial obligations that a company must fulfill, such as loans, accounts payable, and taxes. Liabilities are debts that must be paid back in the future, and they can be short-term (due within a year) or long-term (due beyond a year).

The key difference between assets and liabilities is that assets are resources that a company owns, while liabilities are financial obligations that a company owes to others. In other words, assets represent what a company has, while liabilities represent what a company owes. A company's goal is to have more assets than liabilities, which will make it financially stable and able to meet its obligations.